Preparing for a Sale
Selling a business is often the culmination of a business owner’s life's work. We empathize with the stakes involved in selling something as cherished as your business. We work with our clients every step of the way to ensure that the developing transaction aligns with their objectives. We work to complete the sale according to their wishes, while providing them assurance that the process is being managed in their best interests. We will not expose a client to the market until they are well informed on the value they can expect to realize through a sale process.
There are costs to a failed sale attempt, particularly with competitors. They could use your confidential information for their business or they may tell your customers, employees and other key stakeholders that you attempted a sale. It’s a choice that can’t be undone. Starting any kind of sale process or discussions is like parachuting out of a plane: you can’t jump back into the plane, so you want to ensure your parachute is meticulously packed. Rigorous preparation and objective assessment of your likelihood of success are essential. We work closely with each of our clients to ensure their business is thoroughly prepared before any interaction with potential bidders. Think of it as packing your parachute.
How Saleable is Your Business?
Far too many business sale attempts fail. Estimates of the failure rate of business sale attempts are higher than 75% and tend to correlate inversely to the size of the business sold. Assessing the saleability of your business is an essential first step on the path to successfully realizing its value. In particular, it helps you objectively assess the likelihood that your business will be sold if you embark on the process. Ignoring this step is dangerous because attempting a sale and failing has heavy costs.
Your business is unique and its saleability requires a unique, objective assessment.
We have worked closely with our partners at The Value Builder System to provide you with a free self-assessment tool. You will receive a summary report that scores your overall saleability and also identifies value enhancement opportunities in your business. If you wish to explore your saleability further, we would be pleased to discuss this with you.
Is It The Right Time To Sell?
The first question before selling a business is whether or not it is the right time to sell. This question has three parts:
- Are you personally ready to sell?
- Is your business ready to be sold?
- Are current market conditions conducive to a sale?
Time Becomes Your Enemy
Being thoroughly prepared is critical because once initial contact has been made with potential bidders, time becomes your enemy. A lengthy exposure of your business to sale discussions with any outside party or parties increases the risks to your business and to the process itself.
Tactical adjustments can be made to minimize the risk of leaks and to protect your business’ information from parties that are less likely to close a transaction. Examples include selection based on prior interaction and verbal pre-qualification on a “no-names” basis. See our Confidentiality and Communication Protocols white paper for a more in-depth discussion.
We will not contact potential bidders on behalf of a client unless we believe their business is saleable and well-prepared for the sale process.